Professional Documents
Culture Documents
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* THIRD DIVISION.
579
580
the Court En Banc has ruled that the CTA now has the power
of certiorari in cases within its appellate jurisdiction.
Taxation; Donor’s Tax; The absence of donative intent, if that
be the case, does not exempt the sales of stock transaction from
donor’s tax since Sec. 100 of the National Internal Revenue Code
(NIRC) categorically states that the amount by which the fair
market value of the property exceeded the value of the
consideration shall be deemed a gift.—Petitioner’s substantive
arguments are unavailing. The absence of donative intent, if that
be the case, does not exempt the sales of stock transaction from
donor’s tax since Sec. 100 of the NIRC categorically states that
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VELASCO, JR., J.:
Nature of the Case
Before the Court is a Petition for Review on Certiorari
under Rule 45 of the Rules of Court assailing and seeking
the reversal of the Resolutions of the Court of Appeals (CA)
in C.A.-G.R. S.P. No. 127984, dated May 23, 20131 and
January
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582
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583
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(c.1) In the case of cash sale, the selling price shall be the
consideration per deed of sale.
x x x x
(c.1.4) In case the fair market value of the shares of stock
sold, bartered, or exchanged is greater than the amount of money
and/or fair market value of the property received, the excess of the
fair market value of the shares of stock sold, bartered or
exchanged over the amount of money and the fair market value of
the property, if any, received as consideration shall be deemed a
gift subject to the donor’s tax under Section 100 of the Tax Code,
as amended.
x x x x
(c.2) Definition of ‘fair market value’ of Shares of Stock.
—For purposes of this Section, ‘fair market value’ of the share of
stock sold shall be:
x x x x
(c.2.2) In the case of shares of stock not listed and traded in
the local stock exchanges, the book value of the shares of stock as
shown in the financial statements duly certified by an
independent certified public accountant nearest to the date of sale
shall be the fair market value.
584
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A.
The Honorable Secretary of Finance gravely erred in not
finding that the application of Section 7(c.2.2) of RR 06-08
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585
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On May 23, 2013, the CA issued the assailed Resolution
dismissing the CA Petition, thusly:
586
In disposing of the CA petition, the appellate court
ratiocinated that it is the Court of Tax Appeals (CTA),
pursuant to Sec. 7(a)(1) of Republic Act No. 1125 (RA
1125),11 as amended, which has jurisdiction over the issues
raised. The outright dismissal, so the CA held, is
predicated on the postulate that BIR Ruling No. 015-12
was issued in the exercise of the Commissioner’s power to
interpret the NIRC and other tax laws. Consequently,
requesting for its review can be categorized as “other
matters arising under the NIRC or other laws
administered by the BIR,” which is under the jurisdiction
of the CTA, not the CA.
Philamlife eventually sought reconsideration but the
CA, in its equally assailed January 21, 2014 Resolution,
maintained its earlier position. Hence, the instant
recourse.
Issues
Stripped to the essentials, the petition raises the
following issues in both procedure and substance:
1. Whether or not the CA erred in dismissing the CA
Petition for lack of jurisdiction; and
2. Whether or not the price difference in petitioner’s
adverted sale of shares in PhilamCare attracts donor’s tax.
Procedural Arguments
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a. Petitioner’s contentions
Insisting on the propriety of the interposed CA petition,
Philamlife, while conceding that respondent Commissioner
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587
Petitioner postulates that there is a need to differentiate
the rulings promulgated by the respondent Commissioner
relating to those rendered under the first paragraph of Sec.
4 of the NIRC, which are appealable to the Secretary of
Finance, from those rendered under the second paragraph
of Sec. 4 of the NIRC, which are subject to review on appeal
with the CTA. This distinction, petitioner argues, is readily
made apparent by Department Order No. 7-02,12 as
circularized by RMC No. 40-A-02.
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588
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589
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590
The nature and extent of the President’s constitutionally
granted power of control have been defined in a plethora of
cases, most recently in Elma v. Jacobi,16 wherein it was
held that:
In their Comment on the instant petition, however,
respondents asseverate that the CA did not err in its
holding respecting the CTA’s jurisdiction over the
controversy.
The Court’s Ruling
The petition is unmeritorious.
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Even though the provision suggests that it only covers
rulings of the Commissioner, We hold that it is,
nonetheless, sufficient enough to include appeals from the
Secretary’s review under Sec. 4 of the NIRC.
It is axiomatic that laws should be given a reasonable
interpretation which does not defeat the very purpose for
which they were passed.17 Courts should not follow the
letter of a statute when to do so would depart from the true
intent of the legislature or would otherwise yield
conclusions inconsistent with the purpose of the act.18 This
Court has, in many cases involving the construction of
statutes, cautioned against narrowly interpreting a statute
as to defeat the purpose of the
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Republic Act No. 1125 creating the Court of Tax Appeals did
not grant it blanket authority to decide any and all tax disputes.
Defining such special court’s jurisdiction, the Act necessarily
limited its authority to those matters enumerated therein. In line
with this idea we recently approved said court’s order rejecting an
appeal to it by Lopez & Sons from the decision of the Collector of
Customs, because in our opinion its jurisdiction extended only to a
review of the decisions of the Commissioner of Customs, as
provided by the statute — and not to decisions of the Collector of
Customs. (Lopez & Sons v. The Court of Tax Appeals, 100 Phil.
850, 53 Off. Gaz., [10] 3065)
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19 Secretary of Justice v. Koruga, G.R. No. 166199, April 24, 2009, 582
SCRA 513.
20 101 Phil. 209 (1957).
594
x x x x
x x x Republic Act No. 1125 is a complete law by itself and
expressly enumerates the matters which the Court of Tax Appeals
may consider; such enumeration excludes all others by
implication. Expressio unius est exclusio alterius.
Petitioner’s contention is untenable. Lest the ruling in
Ursal be taken out of context, but worse as a precedent, it
must be noted that the primary reason for the dismissal of
the said case was that the petitioner therein lacked the
personality to file the suit with the CTA because he was
not adversely affected by a decision or ruling of the
Collector of Internal Revenue, as was required under Sec.
11 of RA 1125.21 As held:
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597
The respective teachings in British American Tobacco
and Asia International Auctioneers, at first blush, appear to
bear no conflict –– that when the validity or
constitutionality of an administrative rule or regulation is
assailed, the regular courts have jurisdiction; and if what is
assailed are rulings or opinions of the Commissioner on tax
treatments, jurisdiction over the controversy is lodged with
the CTA. The problem with the above postulates, however,
is that they failed to take into consideration one crucial
point –– a taxpayer can raise both issues simultaneously.
Petitioner avers that there is now a trend wherein both
the CTA and the CA disclaim jurisdiction over tax cases: on
the one hand, mere prayer for the declaration of a tax
measure’s unconstitutionality or invalidity before the CTA
can result in a petition’s outright dismissal, and on the
other hand, the CA will likewise dismiss the same petition
should it find that the primary issue is not the tax
measure’s validity but the assessment or taxability of the
transaction or subject involved.
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24 G.R. No. 163445, December 18, 2007, 540 SCRA 536, 549-551.
598
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As a result of the seemingly conflicting pronouncements,
petitioner submits that taxpayers are now at a quandary
on what mode of appeal should be taken, to which court or
agency it should be filed, and which case law should be
followed.
Petitioner’s above submission is specious.
In the recent case of City of Manila v. Grecia-Cuerdo,25
the Court En Banc has ruled that the CTA now has the
power of certiorari in cases within its appellate jurisdiction.
To elucidate:
The prevailing doctrine is that the authority to issue
writs of certiorari involves the exercise of original
jurisdiction which must be expressly conferred by the Con-
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600
Evidently, City of Manila can be considered as a
departure from Ursal in that in spite of there being no
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100, which was already in force the moment the NIRC was
enacted.
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